The act's objective is that the sale, supply and consumption of alcohol should be undertaken safely and responsibly and the harm caused by the excessive or inappropriate consumption of alcohol should be minimised.
Local councils do not have to adopt their own policies, in such cases they can adopt the act's default national trading hours of 8am to 4am for on and club licences and 7am to 11pm for off licences.
However, Mr Hill said councillors had every intention of putting their own rules in place.
He said councillors could restrict the location of off and on licensed premises, cap the number of licences issued, limit trading hours or issue new licences with certain conditions.
At the moment, the council has limited powers, including not being allowed to stop a licensed premises opening in a particular area.
Councillor Maureen Waaka will be District Licensing Committee chairwoman after being elected to the position by fellow councillors late last year. Mrs Waaka said the production of a Local Alcohol Policy would be a long process but the council wanted to make sure everyone had their say and all relevant agencies were involved from the beginning.
"We need to recognise we have a very mixed community and there are areas where we could do a lot better.
"For those people who are responsible and run their licensed premises well, we are not looking at you - the aim is to reduce harm and the spin-offs from the misuse of alcohol that is a big problem for police and hospitals." Mrs Waaka said the committee would be looking for practical solutions where the community had its own say.
"How many off licences should we have and are they in the right places?" She said it was an exciting project where Rotorua could control its own destiny regarding alcohol and its consumption.
Rotorua publican and Hospitality Association vice-president Reg Hennessy said he looked forward to the consultation process, applauding the council for its efforts in helping to reduce alcohol-related crime in the city.
"Maureen [Waaka] has had a lot of experience in this area and is an able person to lead this initiative. People drinking in our suburbs, often uncontrolled, certainly leads to more alcohol-related harm."
Mr Hennessy said a lot more training and education had to go into the regulatory side of the industry and he believed there were already far too many off licences open in the city's suburbs.
"When there are two or three off licences in one small shopping centre then you are sure to have a problem."
Mr Hennessy also said the influence of supermarkets selling alcohol should also be seriously looked at.
"Our CBD is very well policed but I've never seen a licensing officer in a supermarket."
Mr Hennessy said he looked forward to getting further clarity from the council and taking part in the consultation process.
WHAT CAN THE COUNCIL DO?
Set opening and closing times for all licensed premises
Restrict the number of off and on licensed premises
Restrict where off and on licensed premises can be located
Force the closure of off and on licensed premises where they fall outside the new rules
Could refuse a licence even when there are no objections